Lombard Odier survey: Next Gen HNWIs go “all in” on Islamic and Sustainable Assets

• Demand for Islamic investment strategies in the Middle East is very high among younger investors, and almost as strong as for older generations. The vast majority (91%) of younger investors already allocate to this asset class.
• A significant majority (81%) of younger investors already consider sustainability factors in their investment decisions and 73% believe that this can drive better investment performance.
• Younger investors in the region believe that there are significant opportunities in the digital and tech sectors (79%) and that private assets represent an important asset class (60%).
• The Next Gen respondents show a strong sense of loyalty to the Middle East, with the vast majority (89%) holding their assets in the region. However, 23% are rethinking the geographical set-up of their family wealth.

Lombard Odier, a leading global wealth and asset manager with a 50-year legacy in the Middle East providing wealth planning solutions, today revealed further results from its ‘Middle East investor views 2022’ survey, which examine the investment habits of next generation investors.

Having surveyed 300 high net worth individuals (HNWIs), of which 200 were under the age of 40, the findings reveal that younger investors are more likely to seek investments that comply with their values, including in Islamic and sustainability-focussed assets, while seeking a wealth management partner that shares their investment values and principles.

Younger investors in the region are positive on values-based assets such as Shariah-compliant and Islamic investments, alongside those taking sustainability factors into account. 91% say they already allocate to Islamic investments, while 88% plan to increase their allocations to sustainable assets. This comes as no surprise given the positive performance of sustainable investments, with 73% of respondents believing that they can generate improved returns through ventures that drive the transition to a net zero economy, and 74% assuming that new business opportunities will be found in sustainable sectors in the region. 

“Islamic Finance has proven its resilience against the worst of situations” said a younger investor in the UAE, with a younger Saudi investor commenting: “Sustainable investing is a key business fundamental for us. We formulate our investments and determine whether they are sustainable according to key factors, prioritising these conditions.”

Adherence to Islamic principles is also a key area of focus. While the families of 85% of young respondents share traditional Middle Eastern values based on religious or cultural principles, 31% say those traditional values are updated for the present day. This contrasts with older investors, 79% of which say their values are exclusively traditional.

There is also a divergence in the objectives of younger and older investors in preserving and growing their wealth. Younger investors have a greater focus on improving their lifestyle and remaining wealthy compared to older investors over the age of 40 (45% vs 16%), who are more interested in their financial and reputational legacy.

The survey also highlights the geographic spread of younger respondents’ investments. 89% of younger HNWIs hold their assets in the Middle East and intend to keep them there over the next five years, while the remaining 11% keep their assets in Europe (5%), North America (4%) and Asia Pacific (2%).